From Elliott Eisenberg: "Cash home sales were 32.5% of all transactions in September, down from 35.9% 12 months ago. Cash sales peaked in 1/11 at 46.6% and have historically averaged 25% of sales. At the current rate of improvement, cash transactions should return to 25% by mid to late 2017. Cash sales were 58.3% of REO sales, 32% of resales, 29.1% of short sales and 15.9% of new home sales."
From Stuart Crawford at VIP Mortgage: THE FED FINALLY MADE A DECISION AND RAISED RATES! Remember, this does not always mean that mortgage rates will simultaneously rise, and thus far we have seen very little difference in rates from last week’s announcement.
Last week, the main focus in the markets was the Fed meeting and their plans on future interest rates. Financial markets experienced a great deal of volatility both before and after Wednesday's highly anticipated Fed announcement. The net result for mortgage rates was that they ended the week a little higher.
After holding the federal funds rate near zero for seven years, the Fed announced on Wednesday a widely expected rate hike of 25 basis points (0.2500%). According to the Fed statement, there has been "substantial improvement" in the labor market, and the economy is on a path of "sustainable improvement." Regarding future policy, Fed officials expect that economic conditions will warrant only "gradual" increases in rates. The statement also noted that the Fed does not expect to reduce its holdings of Mortgage Backed Securities (MBS) and Treasuries any time soon. While there has been a wide range of forecasts about what "gradual" means for future rate hikes, investors overall were pleased that the Fed does not appear to be in any rush to take additional steps to tighten monetary policy.
The Fed's dual mandate includes striving for maximum employment and stable prices. There is little disagreement that the labor market has been steadily improving, but inflation has remained below the Fed's desired rate. In the statement, Fed officials expressed that they were "reasonably confident" that inflation would rise to their target level. One widely followed indicator released on Tuesday, the consumer price index (CPI), showed that core inflation in November continued its steady climb seen this year (core inflation excludes the volatile food and energy components).
Mortgage markets will close early on Thursday and will be closed on Friday in observance of Christmas. Mortgage markets often are more volatile than usual during the last two weeks of December due to lighter trading volumes.
Stuart can be reached at 480.776.2954